VA EHRM Modernization Project Management Task Order Exceeds $178M, Awarded Sole-Source to Oracle Health

Contract Overview

Contract Amount: $178,784,835 ($178.8M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-05-17

End Date: 2020-09-16

Contract Duration: 853 days

Daily Burn Rate: $209.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF TASK ORDER 36C10B18N0001 UNDER IDIQ CONTRACT 36C10B18D5000 FOR PROJECT MANAGEMENT, PLANNING, STRATEGY AND PRE-INITIAL OPERATING CAPABILITY (IOC) BUILD FOR THE VA ELECTRONIC HEALTH RECORD MODERNIZATION (EHRM) SOLUTION. THESE SERVICES INCLUDE PROJECT MANAGEMENT, FUNCTIONAL MANAGEMENT, TECHNICAL MANAGEMENT, ENTERPRISE DESIGN AND BUILD ACTIVITIES AS WELL AS PRE-IOC INFRASTRUCTURE BUILD AND TESTING.

Place of Performance

Location: KANSAS CITY, WYANDOTTE County, KANSAS, 66111

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $178.8 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: IGF::OT::IGF TASK ORDER 36C10B18N0001 UNDER IDIQ CONTRACT 36C10B18D5000 FOR PROJECT MANAGEMENT, PLANNING, STRATEGY AND PRE-INITIAL OPERATING CAPABILITY (IOC) BUILD FOR THE VA ELECTRONIC HEALTH RECORD MODERNIZATION (EHRM) SOLUTION. THESE SERVICES INCLUDE PROJECT MANAGEMENT, FUNCT… Key points: 1. The Department of Veterans Affairs awarded a $178.8 million task order for EHRM modernization project management services. 2. The contract was awarded sole-source to Oracle Health Government Services, Inc., raising questions about competition. 3. Services include project management, planning, strategy, and pre-IOC build for the EHRM solution. 4. The contract duration was 853 days, ending in September 2020. 5. The primary sector is IT services, specifically Computer Systems Design.

Value Assessment

Rating: questionable

The total award amount of $178.8 million for project management and related services appears high, especially given the sole-source nature of the award. Benchmarking against similar large-scale IT project management contracts would be necessary to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award to Oracle Health Government Services, Inc. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The sole-source award may have resulted in a higher price than if the contract had been competed, impacting taxpayer value.

Public Impact

Veterans may experience disruptions or delays in the EHRM modernization due to potential inefficiencies in sole-source project management. The significant investment raises expectations for successful EHRM implementation and improved healthcare delivery for veterans. Lack of transparency in the procurement process could erode public trust in VA's spending practices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
High contract value for project management services.
Potential for cost overruns without competitive pressure.

Positive Signals

Addresses critical need for EHRM modernization.
Awarded to a known entity in the health IT space.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Systems Design Services. Spending benchmarks for large-scale IT project management and modernization efforts can vary widely, but significant investments are common for complex federal systems.

Small Business Impact

The data indicates that small business participation was not a factor in this sole-source award, as the contract was awarded directly to Oracle Health Government Services, Inc. There is no indication of subcontracting opportunities for small businesses.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny regarding the justification for not competing the requirement. Oversight should focus on ensuring the contractor delivers on project milestones and manages costs effectively within the awarded amount.

Related Government Programs

Computer Systems Design Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Lack of competition
Potential for overpricing
Limited transparency in procurement
High dollar value for project management services

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $178.8 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. IGF::OT::IGF TASK ORDER 36C10B18N0001 UNDER IDIQ CONTRACT 36C10B18D5000 FOR PROJECT MANAGEMENT, PLANNING, STRATEGY AND PRE-INITIAL OPERATING CAPABILITY (IOC) BUILD FOR THE VA ELECTRONIC HEALTH RECORD MODERNIZATION (EHRM) SOLUTION. THESE SERVICES INCLUDE PROJECT MANAGEMENT, FUNCTIONAL MANAGEMENT, TECHNICAL MANAGEMENT, ENTERPRISE DESIGN AND BUILD ACTIVITIES AS WELL AS PRE-IOC INFRASTRUCTURE BUILD AND TESTING.

Who is the contractor on this award?

The obligated recipient is ORACLE HEALTH GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $178.8 million.

What is the period of performance?

Start: 2018-05-17. End: 2020-09-16.

What was the specific justification for awarding this substantial task order on a sole-source basis, and were alternative competitive strategies considered?

The provided data does not detail the justification for the sole-source award. Typically, sole-source awards require a documented justification, such as a lack of available qualified sources or urgent and compelling needs. Without this documentation, it's difficult to assess if competitive strategies were adequately explored or if this was the most appropriate procurement method for taxpayer value.

How does the $178.8 million cost for project management and pre-IOC build compare to industry benchmarks for similar large-scale health IT modernization projects?

Benchmarking this cost requires detailed comparison with similar government or private sector EHR modernization projects, considering scope, complexity, and duration. Given the sole-source nature, it's challenging to ascertain if this represents fair market value without competitive bids. Further analysis of project deliverables against cost is needed.

What mechanisms were in place to ensure effective project oversight and accountability for Oracle Health Government Services, Inc. given the sole-source award?

The data does not specify oversight mechanisms. Effective oversight for sole-source contracts typically involves robust contract management, performance monitoring, and regular reporting. The VA would need to demonstrate stringent oversight to ensure the contractor meets objectives, manages risks, and delivers the EHRM solution effectively within the awarded budget.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cerner Corporation

Address: 10200 ABILITIES WAY, KANSAS CITY, KS, 66111

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $178,784,835

Exercised Options: $178,784,835

Current Obligation: $178,784,835

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $36,463,061

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10B18D5000

IDV Type: IDC

Timeline